AMP Capital has announced its Wholesale Office Fund will become carbon neutral by 2030, a move that has seen the Clean Energy Finance Corporation invest $100 million to help meet the strong target.
The fund has also committed to raising the portfolio’s NABERS average to 5 stars by 2020 and 5.5 stars by 2030, and achieving Green Star Performance ratings for all wholly owned assets in 2017.
The $4.7 billion AMP Capital fund has a portfolio of 12 premium properties and a pipeline that includes Quay Quarter Sydney and the Australian Technology Park.
The fund joins Investa in striving for carbon neutrality, which last year announced a 2040 target for its $10 billion office portfolio and business operations.
Speaking to The Fifth Estate, head of sustainability, real estate at AMP Capital Chris Nunn said the CEFC investment signalled how important the built environment was in delivering a low carbon future.
“It makes sense for the CEFC to use the investments they’re making to push property companies to adopt stronger targets,” he said.
The CEFC is also keen for AMP Capital to share learnings and expertise gained from moving towards zero carbon with the broader property industry.
The news follows a call from the Green Building Council of Australia for all new buildings to be carbon neutral by 2030, and existing buildings by 2050.
How will it get there?
Nunn said while the new building space would be relatively straightforward in meeting high NABERS and Green Star targets, existing properties were more of a challenge.
There is a massive focus on energy auditing and 10 year capital budget planning so that energy efficiency improvements can be “programmed in”.
Tactics will include LED lighting upgrades of common areas, LED retrofits at time of tenant vacancy, tuning and control upgrades for building management systems, an increased focus on monitoring and analytics over real time and a program of upgrades to core equipment.
AMP Capital will also seek to negotiate green lease clauses with mutual NABERS performance targets.
While energy efficiency is the obvious first step, Nunn said the move to net zero emissions would require “balancing consumption with the purchase of renewable energy”.
Due to the nature of commercial property, on-site solar will not be enough to meet the target, so AMP Capital is currently researching the role of procuring renewable energy through power purchase agreements.
Nunn said a feasibility study has been conducted and the results show that 20 per cent of energy supply could be supplied cost-effectively from renewables through a PPA “in the near future”.
He said the $100 million CEFC injection would also help new developments become highly efficient.
At Quay Quarter Sydney, designed by Danish firm 3XN, the building was taking a “fabric first approach”, Nunn said, with horizontal and vertical external shading a distinguishing feature that would reduce heat loads, which was a “great low energy starting point” to work from.
He said the CEFC was also interested in co-benefits, with Quay Quarter also targeting a WELL Building rating, and implementing a large roll-out of SAMBA sensors, a University of Sydney-developed IEQ monitoring technology.
“These great targets are part of a bigger plan that’s really holistic and covers the full range of ESD issues investors are concerned about,” Nunn said.
“Responsible investors are increasingly looking for demonstrably green assets, which deliver investment returns while minimising risk. Our customers also demand high sustainability standards that support their wellbeing, align with their values and minimise operating costs.”
Helping the push to net zero
CEFC Investment Funds lead Rory Lonergan said there was a huge opportunity to push the boundaries of energy efficiency in the property sector, and its investment would help the property sector to push towards zero carbon.
“With this investment, the CEFC is pleased to support AMP Capital in its objective to deliver net zero emissions across the commercial property portfolio,” he said.
“The positive impacts of this investment and AMP Capital’s commitments will spread well beyond the AWOF portfolio, providing a clean energy model for other major property developments.
“This really sets a new benchmark for the commercial property sector in Australia.”